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No Accession for the European Part of the Netherlands

The arguments not to ratify the Cape Town Convention for the European part of the Netherlands (i.e.: the Netherlands which is a Member State of the European Union), presented by the Minister of Foreign Affairs, are briefly worded and almost scant. It is obvious from the critical remarks by the Council of State in its advice regarding the draft letter by the Minister of Foreign Affairs asking for tacit (i.e. without any oral or written discussion in Parliament) acceptance of the Convention and Aircraft Protocol that the Council of State would have valued more elaborate arguments. The Council of State explicitly asked the Dutch government to reconsider its decision not to ask for permission to accede for the whole Kingdom.[1] In his reply the Minister of Foreign Affairs makes clear that his decision remains unchanged not to join the Convention for the European part of the Netherlands.

In his letter to Parliament the Minister of Foreign Affairs puts forward several arguments against accession of the European part of the Netherlands. His arguments are based on an analysis of the Convention and the Protocol from the viewpoint of underlying policies. Each policy is first described, then it is concluded that for the European part of the Netherlands this policy is either irrelevant or not acceptable, followed by the (implicit) conclusion that the situation is different for the Caribbean islands.[2]

The following policy aspects were put forward to justify non-accession for the European part of the Kingdom:

  • (a) The Convention aims to strengthen the position of aircraft manufacturers and financiers, particularly in developing countries.[3]
  • (b) Under the Convention regime financiers are given an unreasonably strong position vis-a-vis buyers of aircraft. The Convention promotes freedom of contract, which allows the financier to make agreements which are disadvantageous for the debtor. Reference is made to the open-ended concept of “default”, which would give considerable freedom to act on the part of the creditor, and the consequences of default which differ from Dutch civil law.[4] The Minister mentions, e.g., that under the Convention regime the financier can agree with the debtor that he becomes the owner of the object, albeit under the obligation to deduct the value of the object from the existing debt. Such a clause could easily violate article 3:251 of the Netherlands Civil Code.[5]
  • (c) The Netherlands does not have an aircraft industry, it does not have an offshore aviation financing industry, nor are there are any problems in the Netherlands concerning the giving of security when it comes to financing of aircraft materials.
  • (d) Royal Dutch Airlines, at least for the time being, was not interested. The Netherlands Railways and the Netherlands Association of Banks even considered accession to the Cape Town Convention as undesirable (“onwenselijk”).[6]
  • (e) Only EU Member States which have a direct interest in application of the Cape Town Convention had at that time become a party: Ireland and Luxemburg.

To summarise: Accession would, according to the Dutch government, not create any new economic benefits and Dutch civil law provides a better balance of interest between creditors and debtors. The Netherlands therefore did not have a direct interest in accession.

  • [1] Parliamentary history, document no. 32 227 (R 1904), B and nr. 2, p. 2. Particularly B.P. Honnebierhas argued in favour of accession, both for the Netherlands and for the Dutch Caribbean islands.See, to mention only a few of his articles: B.P. Honnebier, The Cape Town Convention andInternational Registry for Mortgages and other Secured Interests in Aircraft/La Convention du Capet le Registre International pour hypotheques et autres garanties constituees sur les aeronefs/DieKapstadt-Konvention und das international Register uber Pfandrechte und andere Sicherungsrechtean Luftfahrzeugausrustungen/La Convenzione del Capo e il Registro Internazionale per ipoteche ealtre garanzie su aeromobili/La Convention de Ciudad del Cabo y el Registro Internacional deHipotecas y otras Garantias Reales en la Aviation, Notarius International 2006, p. 21ff.;B.P. Honnebier, Clarifying the alleged issues concerning the financing of aircraft engines. Somecomments to the alleged pitfalls arising under Dutch, German and international law as proposed inthe ZLW 1/2007 (pp. 33-44), Zeitschrift fur Luft- und Weltraumrecht 2007, p. 383 ff.;P.B. Honnebier, The European air transport sector requires an international solid regime facilitating aircraft financing: The Cape Town Convention, Tijdschrift Vervoer & Recht 2007, p. 151ff.
  • [2] As the arguments are presented in an extremely brief manner, much is left implicit and open. Thismakes a critical analysis of the arguments against and in favour of accession rather difficult,because somewhat speculative.
  • [3] Implicitly the Minister is stating that, because the Netherlands is not a developing country, noaccession is needed.
  • [4] It is interesting to note that these arguments would also apply mutatis mutandis to the Caribbeanislands, where, albeit with some changes, the new Netherlands Civil Code has been taken over.
  • [5] See also A.F. Salomons, Should we ratify the Convention on International Interests in MobileEquipment and the Air Equipment Protocol? Some remarks from a Dutch point of view, EuropeanReview of Private Law, 2004, p. 67ff.
  • [6] No further explanation is given as to why it would be undesirable.
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